Guide to moving home
- Moving home is as stressful as you make it
- From getting the mortgage to the practicalities,
- Our guide eliminates the hassle from the process
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It’s critical that homemovers get to grips with the entire process of moving house long before they pick up the keys to the new property. This enables them to make the right decisions (and there are many) at the right time.
Our ‘moving home mortgage guide’ will help you navigate that journey. By understanding your options and how to optimise your activity, you can secure the optimal mortgage deal for your unique, personal situation.
Don’t get complacent because you’ve ‘Done it all before’
As an existing homeowner, you’ve experienced getting a mortgage when you bought that home. Moving home is different to buying your first home, as you’ll see from our checklist at the end of this guide.
Whether it’s moving to your dream home, second-stepping or downsizing, you’ll no doubt experience that same thrill. But moving from one home to another comes with its own stress points.
Once you realise what’s involved, moving home may even seem more complicated than first time around. Mainly because you have the additional burden of having to sell your existing home. But, as is often the case, you may be part of a chain, too.
From selling your current home to sorting out the mortgage for your new one, we’ve got some tips and insights to help.
Understanding your mortgage options
If you’re selling your existing home and buying a new property, your options are straightforward.
It can get more complicated if you’re renting out your existing home and moving into another home (Let-to-Buy; see below). But, for simplicity’s sake, this guide assumes that you’re selling your current home and buying a new property to live in.
The most common homemover questions
Moving home is a good time to check whether the mortgage you have is still fit for purpose. But you will need to check with your existing mortgage provider whether any ERC (early repayment charges) apply to paying off your existing mortgage.
Depending on your specific deal, you may also be allowed to ‘port’ your current mortgage to a new home. This enables you to keep the same mortgage deal with your existing provider. But it’s also worth checking to see what options are available from the market as a whole.
So, let’s see if we can answer the two most prominent questions playing on homemovers’ minds:
- What happens to my existing mortgage when I move home?
- Can I take my mortgage with me or should I look for a cheaper deal?
How to port your mortgage when moving house
If your current mortgage deal has a competitive, low interest rate, ask a mortgage broker to explore if you can transfer this deal over to the new property. If your current mortgage lender doesn’t allow you to port your mortgage, you’ll need to take out a full mortgage on your new property.
Even if your first mortgage went like a dream, assume nothing: the market is dynamic right now. Things may have changed that affect lenders’ criteria; your own financial status and credit history may have changed, too.
But even if your financial circumstances haven’t changed, many factors have impacted the mortgage market landscape. Increasing interest rates, inflation and global uncertainty have led to lenders tightening their underwriting criteria. They carry out more stringent checks to test your true mortgage affordability against this turbulent backdrop.
Porting your mortgage: the key points to remember
You’re effectively reapplying, so will need to go through the same affordability and credit checks you went through to get the current mortgage.
- You will have to pay the obligatory fees again
- Valuation fee for the new lender’s report on your new property
- Legal fees
- Stamp Duty (if the house value attracts SDLT at time of application)
- You may not qualify if your employment or financial status has changed since you last applied, e.g.
- if you’ve changed job
- become self-employed
- had children
- amassed other forms of debt besides your existing mortgage
- or any number of changes to your financial circumstances have occurred that may make a lender consider you ‘high risk’
- The lender might not accept the type of property you want to buy;
- If the combination of market factors and/or your circumstances negatively align, you may find it harder to get approved for the same mortgage;
- If your current lender has tightened their affordability criteria, you might not be able to borrow the amount that you need, so have to consider another lender instead.
Should I port my existing mortgage to the new property?
There are no fast and hard rules for you to follow about porting your mortgage. Every criterion for making that decision rests on your personal circumstances. Let’s have a look at the main ones:
Early Repayment Charges
If you’re still within your current lender’s initial introductory rate period (e.g., part way through a five-year fixed initial rate period) you’re likely liable for early repayment charges if you switch to a new lender.
Early Repayment Charges (ERC) are usually between 1% and 5% of the outstanding debt. The actual percentage you’re liable for will depend on how long you have left of your initial rate period.
On a £200,000 outstanding debt (mortgage), for example, the early repayment charge will likely be between £2,000 and £10,000 (1% and 5%).
If you’re in the first year of your initial rate period, you’ll be looking at repaying 5% of the outstanding debt. If you’re in the last 12 months of your five-year initial rate period, the ERC is likely to be only 1%.
If your introductory deal is over, meaning you’ve fallen onto your lender’s SVR, there are unlikely to be any early repayment charges, but always check.
The astronomical trajectory of recent interest rates
If you secured your current mortgage prior to June 2022, you’re probably on a fabulously low interest rate in comparison to what’s on offer today. You probably also have several years remaining on that initial rate period.
If so, you should definitely look to port your existing mortgage to your new property. Especially if the new house you’re buying is of the same value or less than your current one, i.e. you need no further borrowing.
Interest rates will come down with inflation, but probably not to levels prior to summer 2022. And probably not during your remaining initial rate period if you only have a year or two left on it.
Do the maths: what works for you?
The key to making the right decision will be to do the maths. Does paying an ERC make financial sense? Have you got a few years left on your low-interest initial rate period? Which decision will leave you better off in the long run?
See if it adds up for you. If the rates on offer from other lenders are more attractive, it might make financial sense to pay the ERC penalty and take out a new mortgage elsewhere.
Ultimately, it’s up to you. At Mortgage Quest, we’re always happy to give you a helping hand in finding the solution that best fits your needs and pockets.
A Quick word on Let-to-Buy
You may be planning to keep your current home as a long-term investment. This could bring in extra income, but does also mean you’ll need two simultaneous mortgages.
Let-to-buy is the mortgage which would facilitate you renting your old home. You’d also need a separate residential mortgage to pay for the home you plan to live in while renting your existing home.
Let-to-buy could also be suitable for home movers if you’re:
- finding it difficult to sell your current home due to market conditions;
- in a rush to move to a new property and can’t wait to sell your existing home;
- temporarily relocating for a short time, but plan on returning in the future.
The cost of moving home
There are many individual costs (fees) to consider when you move home in the UK:
- Stamp Duty
- Estate agents’ fees (if you’re selling your current home)
- Legal (conveyancing) fees, including land registry fee
- Utility connection bills including gas, electric, water, landline, internet connection and streaming/TV packages
They’re the main, traditional costs. Here’s a supplementary list to those, some of which you may never have heard of since you last bought a home:
- Mortgage arrangement fee (covering your mortgage account set-up and administration)
- Digital transfer fee
- Broker fee
- Storage fees (if you’re downsizing/let-to-buy)
You can reduce some of the costs applicable to you by comparing providers, especially storage insurance. The results for some of those fees may differ in the area you’re moving to compared with what you were paying in the now-rented house.
We recommend obtaining at least three quotes per service, which should also include any applicable connection fees.
Tips for moving home and searching for a new home
Once you’ve decided on the area you want to move to, you should register with several established estate agents. They’ll keep you updated about any suitable properties, and help you liaise with sellers when you start making offers.
Important: you don’t have to use your estate agent’s mortgage broker, even if they say you do. It’s your choice which mortgage broker you use, especially if your income deviates from the PAYE norm!
Choosing your property
In your mind (or your partner’s), you have an image of your ideal home; maybe:
- Four bedrooms
- A detached property
- Big gardens for the kids/pet
- A garage or outhouse for your side hustle
Relay as much of this to your estate agent as you can. Once they know your budget and where you want to move to, they’ll help you find that home, or see how realistic your criteria are.
You may not move again for years, so helping the estate agent help you is the best chance you have of realising your dream property. When creating that idyll in your mind, balance it out with other aspects that might be important to you that you’ve not factored in:
Different homeowners have different needs. Younger couples will probably have different priorities to a couple settling down to retire. Some of the things your location might then offer are:
- Access to public transport/commuter-friendly routes
- Is the region ‘up-and-coming’, due for urbanisation or radical change?
- What industrial developments are in the pipeline?
- Are the schools in your region good performers (and can you get to them)?
Planning for day-to-day living
- How do your utility bills stack up, and who are the providers?
- Are the central heating and insulation (including windows) efficient?
- If the house has a boiler, is it owned or leased (thinking BOXT)?
- Does the home have a video security system (and are the incumbent owners leaving it)?
- What types of locks do the windows, doors and any outbuildings have?
- Are there tiles missing from the roof?
- Are there signs of damp/condensation?
- Does the configuration work for you?
- Is there planning permission to change the layout if not?
- If there are cracks in the plaster, make sure your searches check for the cause;
- If searches reveal major issues, don’t delay dealing with them
- take advice and get the ball rolling to address them
Understanding the chain reaction
With any luck, you’ll not be in a house-moving ‘chain’. But, with so much competition for so few affordable homes, chances are, you’ll have to coordinate with other buyers.
As a homemover, you’re in a sort of chain already. You’ve got to sell your property (usually) before you can move into the next. But you may just be a link in a longer chain.
If the people buying/renting your home are first-time buyers, that’s a good start. When you see their decision in principle from their lender, you have a certain amount of confidence in taking your home off the market.
But the homeowners you’re buying from may well be in a chain of their own. Getting early visibility to this chain could sway your decision whether to buy or not. Talking to your solicitor will help keep your expectations realistic.
Ensuring everyone completes on the same day (which they’d have to) takes a lot of coordination. Yes, that’s what you pay your solicitor/conveyancer for; but, if you’re in a chain, you’re relying on all the other solicitors to pull it together, too.
Protecting the chain
You might think a lot of what happens in the chain is beyond your control. For most of it, you’re right. But there are things that you can do to ensure you’re not the weak link in the chain when the pressure’s on.
The first thing to do is create a calendar (or buy a new one if you’re not digitised) purely for your house move. You can use Google, Outlook or Apple’s proprietary calendars, or install a calendar app of your own choosing. The key is: keep it simple, keep it separate.
There’s a countdown check-list coming up, but here’s what you might want to add to that calendar from the off:
- Reminders to progress those in the chain you have access to at regular intervals;
- Coordinate your diary with solicitors, estate agents, etc.;
- Speak to your conveyancer about clauses, which can help everyone in the chain meet expected/agreed milestones;
- Keep days free to look at other houses; chains collapse, and you need to have a Plan B should yours fail.
Timeline countdown to moving home
Once your offer’s accepted and you’ve accepted an offer on your home, you should think about everything the move will entail. If things start to gather pace, you don’t want to be rushing around at the last minute trying to organise everything.
There are two areas you need to focus on:
- What you can do;
- What your solicitor’s doing:
Create an imaginary line between the two, then begin the countdown:
|6-8 weeks from completion
|| 1. Sort what you’re taking with you
|| 2. Plan to dispose of what you’re not:
|| 3. Buy packaging materials to suit needs
|4-6 weeks from completion
|1. Call solicitor: confirm the exchange of contract date
|| 2. Removal:
|| 3. Start packing anything you’re not going to need pre-move:
|| 4. Get storage quotes, if applicable
|| 5. Contact utility providers/Council to tell them you’re moving:
|1-3 weeks from completion
|| 1. Pay bills up-to-date
|| 2. Redirect your post
|| 3. Disassemble flat-pack furniture
|| 4. Pack everything but your essentials
|| 5. Report your final meter readings (if you’ve not got a SmartMeter)
|| 6. Keep your critical documents in easy reach
|| 7. Collect keys to your new home
|| 8. Have a box ready for the essentials you’ll need when you move in:
|1. Have the contracts exchanged?
|| 2. Lock your windows, turn off utilities
|| 3. Drop keys off at your Estate Agents
|| 4. Beat the movers to your new home if you want to clean it first
|| 5. Take base meter readings
|| 6. Ask movers to:
|| 7. Are your utilities online and operative?
|| 8. Where there are locks, do you have keys for them?
|| 9. Repost anything of the previous owner’s
|| 10. Have all your belongings arrived?
|| 11. Talk to your new neighbours:
Getting a Mortgage
Whether you’re stepping up or down the property ladder, we can find you a mortgage. For more information, visit Moving Home Mortgages or call us on 0208 421 7998.